Why are drug prices rising in India? The Supreme Court said the main reason”


New Delhi: The Supreme Court said on Tuesday that gifts given by pharmaceutical companies to doctors are not free. Their effect comes in the form of an increase in the price of the drug, creating a dangerous public vicious circle. Making these observations, the Supreme Court rejected the pharmaceutical companies’ request to include the cost of free gifts in the income tax exemption. The Supreme Court has said that giving gifts to a doctor is against the law.

Pharmaceutical companies cannot take advantage of the income tax exemption under Section 37(1) of the Income Tax Act. Under this article, such an expenditure, which is incurred for the purpose of carrying on the business, is exempt from income tax. A bench of justice UU Lalit, in its judgment on the matter, observed that the doctor has such a relationship with the patient, whose single written word is the last for the patient. Even if the drug prescribed by the doctor is expensive and beyond the reach of the patient, he tries his best to buy it.

In such a situation, it becomes a matter of great concern when it is learned that the consultation drafted by the doctor is tied to free gifts from pharmaceutical companies. The Supreme Court said that the provision of gifts (conference fees, gold coin, laptop, refrigerator, LCD TV and travel expenses, etc.) are not free, they are added to the price of drugs. This increases the price of the drug. Giving a gift is absolutely contrary to public order, it is explicitly prohibited by law.

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